Look past the recent tumble in PayPal Holdings stock, and “the longer-term outlook for the firm looks as healthy as ever,” Rosenblatt Securities’ Kenneth Hill said in a note to clients. He initiated coverage on the digital-payments company on Tuesday with a Buy rating.
The back story. PayPal shares (PYPL) have dropped almost 11% since the company released second-quarter earnings on July 24 that surpassed Wall Street’s expectations for both earnings and revenue but lowered its full-year revenue guidance. The broader S&P 500 index is down 3.3% over the same period.
PayPal now expects to bring in between revenue of $17.6 billion and $17.8 billion this year, down from the previous guidance of $17.85 billion to $18.1 billion. The new, lower range is far below the consensus of $17.92 billion ahead of the second quarter.